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If one wants to understand what all the fuss is about as the World Trade Organization holds its ministerial conference, Ethan Kapstein's Sharing the Wealth: Workers and the World Economy,

The World Trade Organization imposes obligations on state and local governments that limit their ability to protect consumers, establish environmental standards and undertake economic stimulus in

Anyone who has led a discussion on the economy or trade or globalization
in this country has faced the question, Should I buy American? Sounds
simple enough.

The epic, slow-motion crisis unraveling the global
economic system continues to gather momentum, taking down Southeast
Asia, Japan, Russia, now Brazil. Who's next?

With the Soviet model shattered forever, it is the social democratic one that is now in deep crisis in Western Europe. On the face of it, judging just by the results of June's European elections, the suggestion is too dramatic. The moderate left, respectful of the established order, did not do that badly. In the new European Parliament the Socialist group remains the biggest. It now has 199 members out of a total of 567, compared with 197 out of 518 members in the previous assembly--a slight setback, but hardly a catastrophe.

Admittedly, the prospect for individual parties is gloomier. In Spain, Felipe Gonzalez suffered his first electoral defeat since he came into office twelve years ago. In France, the fall in the Socialist vote put an end to Michel Rocard's presidential ambitions. In Italy it was Achille Occhetto who, faced with Silvio Berlusconi's triumph, resigned as leader of the Democratic Party of the Left (since the Socialist Party has been wiped out altogether, the ex-Communists must now be considered as Italy's moderate left). In Germany, the 5 percent drop in the Social Democratic vote was a big blow to Rudolf Scharping, the new party leader, whose chance to become Germany's next chancellor in the October elections has been seriously weakened. Only in Britain did the left emerge in an apparently comfortable position, though in the past the Labor Party has shown an uncanny capacity for snatching defeat out of the jaws of victory.

To lose an election is not in itself tragic; you may do better next time. But the Western left is burdened with a worse predicament: an obviously obsolescent strategy. Social democracy, in the now accepted meaning of the term, may be defined as the reformist management of the capitalist system. It prospered in the thirty years of unprecedented expansion after the war. Then, as the economic crisis deepened, it tried to cling to consensus politics while the right went on the offensive, attacking labor unions, privatizing public property and breaking international barriers.

Yet even this is not enough. In a highly deregulated world, with the number of jobless in Western Europe at levels unknown since the war, the left is being asked to sacrifice even more. A report on unemployment published by the Organization for Economic Cooperation and Development, which I will analyze below, provides the capitalist cure for the current crisis. It can be summarized in a sentence: The have-nots must bear the cost of capitalism's version of perestroika. If social democracy accepts this prescription, it commits political suicide. But if it wants to carry out reforms today, it must look beyond the confines of existing society, thus breaking with its role, its philosophy and its past. It is this crucial dilemma that we must keep in mind as we rapidly survey the political landscape of Western Europe in the aftermath of its insignificant yet highly revealing election.

The Viscount and the Tycoon

If Germany's political horizon is overshadowed by the parliamentary poll coming in the autumn, France's is already dominated by the presidential election of next spring. After thirteen years of François Mitterrand's Socialist rule, the right is eager to take over. Its trouble is that it has too many candidates. Though the two main contenders--the rough former prime minister, Jacques Chirac, and the smooth current one, Edouard Balladur--belong to the same neo-Gaullist party, their battle is bound to be bloody. On the left, as the prospects of Rocard, who never had the blessing of Mitterrand, were getting dim, Jacques Delors, the outgoing President of the European Commission, was gradually moving into the limelight. The European election was not even a dress rehearsal for next spring's vote: The ruling right-wing coalition put up a common list, which fared badly, capturing only one-quarter of the vote. But the Socialist list, headed by Rocard, did disastrously, with less than 15 percent. Such low scores are partly explained by the fact that, with the exception of Britain, Eurodeputies are elected through proportional representation; the list receiving 5 percent will have some representatives, and people can therefore afford to vote for lesser candidates. This time the killjoys, or the main beneficiaries, each receiving more than 12 percent of the votes cast, were Philippe de Villiers, a sort of Jean-Marie Le Pen with an aristocratic accent, on the right, and Bernard Tapie, a tycoon whose awkward wallet lies, like his heart, on the left.

Philippe Le Jolis de Villiers de Saintignon, to give the Viscount his full title, is a genuine reactionary. He still wages the war of the Chouans against the French Revolution; he resigned from his civil service job when a Socialist became the President of the Republic. He is a fluent speaker rather than a great orator, and he is very ambitious. He played third fiddle in the right's band against the Maastricht treaty. Now, with the two top right-wing champions unavailable because of their high official positions, he is leading the jingoistic battle against Europe's integration. With the millionaire Jimmy Goldsmith as his second and De Gaulle's grandson as third on the list, De Villiers did very well, but he does not seem to have enough charisma to be personally very dangerous. His success, however, is highly perturbing. Though his message is better mannered and aimed at the upper classes, it has a strong affinity with that of Le Pen. With 10.5 percent of the vote, the National Front did suffer a slight setback and its leader may well be past his prime. But the greatest danger is the spread of Le Pen's poison. To say, adding up the two men's vote totals, that nearly a quarter of the French people are now xenophobic may be a slight overstatement. Yet the existence of such an electorate is likely to push the respectable right in an even more reactionary direction.

Tapie is a different kind of fish. He comes from the people and knows their language. To call him a tycoon may be an exaggeration. Though he has taken over and sold many companies, his greatest gift, it turns out, is for getting money from banks. His claim to fame is that he bought the Marseilles soccer team and turned it into the first French club to win the European championship. While living high, Tapie does so on borrowed money; he seems to have more debts than assets. During the electoral campaign he was sued for bribing players from an opposing team and for tax evasion, while his bank tried to seize his yacht and antique furniture. More recently, he was arrested in a dawn police raid. This harassment, presumably designed by opponents to weaken him, actually brought him votes, because it made him appear to be a victim and not a member of the establishment.

Handsome, pleasant, calling a spade a spade, Tapie is a TV natural. He is obviously a supersalesman, but at the same time his hatred of Le Pen's xenophobia seems sincere. While others bow before its inevitability, Tapie will passionately describe unemployment as such a calamity that it must be "outlawed" (how is unspecified). Still, it is a measure of the road traveled by the French Socialists, and Rocard in particular, toward consensus politics and identification with the right that this speculator, this amiable scoundrel, should be taken by a good section of the left's popular electorate as a radical, almost utopian alternative. It is also a sign of the deep change in Western Europe's cultural climate.

In Gramsci's Country

The parallel between Tapie and Silvio Berlusconi should not be overdrawn. The former has neither the financial power nor, above all, the media control of the latter. Tapie is also a committed fighter against the extreme right, whereas Berlusconi had no scruple or hesitation about climbing to power with neo-Fascist backing. Nevertheless, it is significant that the popular heroes of our times are moneymakers, speculators, the owners of successful sports clubs--the "winners" as opposed to the "losers." This shows the tremendous shift in the ideological atmosphere in Western Europe in the past twenty years or so. Antonio Gramsci, the great Italian Communist thinker, stressed the importance of ideological supremacy, or "hegemony," in gaining real political power, as opposed to merely winning an election. It is for totally ignoring his teaching that Achille Occhetto must now pay the penalty. He had to go when the European elections confirmed that the victory of the right in Italy's earlier national elections was no flash in the pan. Berlusconi has come to stay, and Thatcherism in a country that lacks England's centuries-old tradition of bourgeois parliamentary democracy is no joke.

When in 1988 Occhetto took over the leadership of the Italian Communist Party, it still had the support of between a quarter and a third of the Italian electorate. Its handicap was not, as was sometimes suggested, a connection with the Soviet model; it had broken its ties with Moscow long before. The weakness was that, having no socialist substitute for the Russian model, it surrendered to the capitalist ideology prevailing at home. Also, the party kept seeking a historical compromise when the right had nothing to offer. Occhetto, far from reversing this trend, speeded it up. In November 1989, after the fall of the Berlin wall, he sponsored a radical transformation of his movement [see Singer, "P.C.I.--What's in a New Name?" April 16, 1990]. The party, soon to be known as the Democratic Party of the Left (P.D.S.), was to be a looser electoral machine, seeking an alliance with the center and helping it to reform the electoral law. The reward for the P.D.S. was to be an important place in the government. Instead, its policy paved the way for the striking victory of the new right, much more dangerous than its predecessor.

One man cannot be blamed for it all. The whole party, indeed the whole European left, could share part of the blame. During the 1980s, while the labor movement was being defeated through restructuring and international deregulation, the political left meekly surrendered to the ideological offensive that proclaimed capitalism eternal and ruled out any alternative, on the grounds that there can be no freedom without private property, no efficiency without the market and no progress without profits. In Italy the nadir was reached during this year's parliamentary poll, when no distinction could be drawn between the economic program of the ex-Communists and that of the former governor of the Bank of Italy. The harmless, disinfected P.D.S. not only did not obtain the massive vote of the middle classes it counted on, but it also lost a great deal of support from its traditional working-class base. Above all, it opened up a huge avenue on which Berlusconi rode to power. It is true that he was greatly helped in his bid by his control of private television. Yet he could not have advanced so spectacularly without years of ideological retreat by the left. To reverse Orwell, the trouble is not that Big Brother is watching the Italians; it is that the Italians have been watching him passively for too long.

The major question for the P.D.S. today is not whether Massimo D'Alema, Occhetto's successor, or Walter Veltroni, the editor of l'Unità, will take over its leadership after the party congress next fall. The problem for the Italian left--and for the whole West European left--is whether it offers its own solution to the economic crisis or accepts the capitalist establishment's. What is now being proposed is not compromise but the terms for total surrender.

Capitalist Cure

The reports of the Organization for Economic Cooperation and Development are not the work of pamphleteers. They are written by technocrats and edited by diplomats. Hence, when a Jobs Study published on the eve of the European election turns out to be a manifesto against workers' rights, it is worth looking at.

The diagnosis is gloomy. The number of jobless in the O.E.C.D. area, that is, in the advanced capitalist countries, is now put at 35 million. If you add those who have given up looking for a job and the unwilling part-timers, you get 50 million. What is worse, however, is the rise in unemployment and the permanence of the phenomenon. Between 1972 and 1982 the number of unemployed trebled. It declined slightly during the mid-1980s expansion but has been rising ever since. The report does not conclude that something is fundamentally wrong with the system. Instead, it identifies the root of the evil as safeguards for the workers.

The report points out that statistically, the United States has done "better" than Europe by creating a good number of badly paid jobs. ("In 1990 nearly one-fifth of all full-time workers in the United States had earnings at or below the official poverty level.") The O.E.C.D. does not claim this situation is ideal but clearly that is its preference, since the brunt of its criticism is directed at European social programs "motivated to protect people from the worst vicissitudes of economic life"; these programs "have had the unintended but more and more important side effect of decreasing the economy's ability, and sometimes also society's will, to adapt." The catalogue of targets is eloquent: the minimum wage, collective bargaining agreements on a national scale, "relatively high" unemployment benefits, obstacles to wage differentiation and nonunion employment, and so on. To put it plainly: Anything that widens the bosses' freedom to hire and fire is good and anything that empowers the workers to increase their share of the national income is bad.

In calling for the dismantling of the postwar conquests of the labor movement, the O.E.C.D. is not alone. The European Employers' Association has just made a similar plea. The not so revolutionary proposal of Jacques Delors to spur production through public works has been drastically cut by the governments. The reactionary offensive is in full swing. Under the circumstances, it is not surprising that the Socialist parties, fully identified with this system, are feeling heat from their rank and file. Henri Emmanueli, Rocard's successor, admitted the party did not represent "the interests and the hopes" of its voters. In Germany, Social Democrat Rudolf Scharping was accused of projecting an image barely distinguishable from that of the Christian Democrats. This time, however, lip service will not be enough. The leaders of the left must show what controls they are ready to introduce, what protections they will re-establish, what deep changes in society they are determined to make in order to struggle against the scourge of unemployment. They must also realize that class struggle is far from vanishing--and it takes two to play.

Class Solidarity Exists, or Man Bites Dog

Didier Pineau-Valencienne is chairman of Schneider, an old and mighty French conglomerate. He is also known as a ruthless sacker of employees. On May 26 he was arrested in Brussels and charged with accounting fraud; he is accused of cheating Belgian shareholders and the tax authorities by secretly shifting funds to offshore companies. During the twelve days of his detention the press was full of stories about this unusual arrest. It also carried advertisements by the French financial and managerial elite expressing faith in the virtue of their colleague. Not having seen his file, I cannot say whether the Belgian judge was justified in keeping him in jail. Yet the fuss raised by this affaire prompts three comments.

First, the jails of many European countries, notably France and Italy, are filled with thousands of people in preventive detention. From time to time a serious study is published deploring this regrettable situation; it may get a snippet in the press. The fact that a Muslim or poor Frenchman spends twelve months in preventive detention is not news. Pineau-Valencienne's twelve days made the headlines.

Second, is the Italian example contagious? In Germany a series of banking and industrial scandals has shaken people's confidence in the virtue of their boards of directors. In Spain it has shaken the government, showing incidentally that once they are converted to monetarism, Socialists are as good as anyone at chasing money. In France, Tapie is not alone. A party in the ruling coalition, a government minister and two important water companies are under investigation. Pierre Suard, the president of Alcatel, producer among other things of the fast train, is now being sued for fraud and misuse of company funds. All this does not mean that Europe is on the eve of an epidemic of mani pulite ("clean hands," the name given to Italy's massive ongoing corruption investigation).

Finally, who said that class consciousness is disappearing? The French managers have just shown a beautiful example of it. The lack of solidarity lies at the opposite end of the economic spectrum. Admittedly, with the inflow of immigrants, the mass entry of women into the work force and the switch from blue- to white-collar jobs, the composition of the working class has altered deeply. But this is no excuse. Things will not start changing in earnest until the bulk of the exploited people grasp the principle that class conflict should not be waged actively by the few and borne passively by the many.

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